Africa

South Africa’s economy probably entered a technical recession with a second straight quarterly contraction, according to an index that tracks interbank payments, Bloomberg News reported. The BankservAfrica Economic Transactions Index, an early indicator of economic activity, dropped 1.7% in the first quarter compared with the prior three months. A median estimate in a Bloomberg survey of analysts is for a quarterly gross domestic product expansion of 0.2%.

Zambian President Hakainde Hichilema said China and the U.S. have a responsibility to set aside their differences and help countries such as his get the debt relief they need to avoid further damage to their economies, WSJ Pro Bankruptcy reported. With finance officials from around the world gathering in Washington this week for the International Monetary Fund and World Bank biannual meetings, Mr. Hichilema’s country is emerging as a focal point of discussions on how to restructure poor nations’ debts. U.S.

Default-stricken Zambia published figures on Wednesday showing that its total public debt stock climbed to $32.8 billion, including interest arrears at the end of last year, of which $18.6 billion was external, Reuters reported. At the end of June 2022 its total debt including interest arrears was $32.5 billion, with $17.5 billion external. Zambia has been looking to restructure its debt after becoming the first African country to default during the COVID-19 pandemic in late 2020.

Ghana's government and international bondholders are pushing forward with formal debt talks after advisors to both sides signed non-disclosure agreements, three sources with direct knowledge of the matter told Reuters. The West African country, which suspended payments on most of its external debt last year, has picked Lazard as its financial adviser, while a group of international private lenders are represented by Rothschild & Co. Ghana's dollar-denominated debt is more than $13 billion across maturities ranging from 2023 to 2061, according to Refinitiv data.

Nigeria’s central bank beefed up the supply of banknotes to lenders to end shortages that have hampered individual and business transactions and crippled the cash-based economy since January, Bloomberg News reported. Most lenders including United Bank for Africa Plc, Zenith Bank Plc and FBN Holdings Plc called in staff on Saturday and Sunday to help customers access cash in banks or via automated teller machines. The disbursement, in compliance with a central bank directive, is being monitored “personally” by Governor Godwin Emefiele, according to spokesman Isa Abdulmumin.

Nigeria’s central bank increased the key interest rate to the highest level since it was adopted in 2006 and plans to extend monetary tightening to contain inflation and bolster the differential that makes local assets attractive to foreign investors, Reuters reported. The monetary policy committee raised the benchmark rate for a sixth straight meeting to 18% from 17.5% on Tuesday. That was the smallest increase in its current tightening cycle.

Nigeria’s central bank has extended the timeline to swap out its old currency for redesigned notes after the change triggered a cash shortage, forcing businesses to close and leaving millions unable to withdraw their money, the Associated Press reported. The Central Bank of Nigeria announced on Monday that the old notes of 200 naira (43 U.S. cents), 500 naira ($1.08) and 1,000 naira ($2.16) will remain legal tender until Dec. 31.

Ghana’s embattled cedi has rebounded 5% against the dollar in March as the government’s decision to suspend external debt payments eased demand for greenbacks in the local foreign exchange market, Bloomberg News reported. The west African nation unilaterally stopped payments on eurobonds and other external debt in December, pending an agreement with creditors that is needed to unlock an International Monetary Fund bailout. Traders said the impact is beginning to filter through to the currency, after it lost ground in the first two months of the year.

A panel of investors and banks has ruled Ghana’s missed coupon payments on its foreign denominated bonds counts as a failure-to-pay event, paving the way for a payout of the default-insurance contracts tied to the country’s debt, Bloomberg News reported. The Credit Derivatives Determinations Committee (CDDC) made the decision at a meeting held on Monday, according to a notice on the panel’s website on Friday. Ghana skipped payment of interests on Jan. 18 of a $1 billion eurobond maturing in 2026.

Nigeria’s top court ordered the central bank to halt its removal of old high-denomination banknotes from circulation, a move that’s created an acute cash shortage in Africa’s largest economy, Bloomberg News reported. The Supreme Court decided Friday that the Central Bank of Nigeria’s plan to discontinue the use of old bills by Feb. 10 was unconstitutional. The judges ruled that the notes should remain in circulation until the end of the year, Nasir El-Rufai, one of the state governors that brought the suit, told reporters afterwards.